Blog

The Apple of My Eye

In the past week or so this little corner of the world I've been working on, obsessing over, and rooting for has gone from earnest caterpillar to technicolor butterfly seemingly overnight, without passing through the awkward cocoon phase.

Audio has arrived and nobody's happier about it than me.

In the past week or so, there has been a series of events that counted individually could be characterized as “transformative.” In the collective they're extraordinary.

First, Clear Channel, the biggest traditional radio company in the U.S., showed that it intends to leverage technology – not run from it – by striking a deal with Warner Music Group that would treat all music content as the same, regardless of whether a song is delivered through one of its hundreds of terrestrial towers, a mobile app or via desktop. In creating a more media-neutral royalty structure with the label (itself to be congratulated for stepping into the breach), the game really changed. Clear Channel is no longer fighting the digital battle with one arm tied behind its back. It can bring its considerable talent and resources, including its iHeart app and Festival, to bear in the digital sphere now that costs are in line. Many weren’t sure a major deal like this would ever happen, but now we’re seeing two industry elders simultaneously rallying the troops and emitting a united battle cry for terrestrial radio entering the digital age.

A day or so later, the second largest radio company in the U.S., Cumulus, announced it was making a major investment in the well-funded and regarded music discovery app Rdio. In exchange for promotions and sales support, Cumulus now gets a digital outlet with teeth. Again, count me among those who did not see this move coming. Cue the line between traditional and digital rapidly fading into grey.

Next, Pandora won an important court decision that would seemingly pave the way for it to lower its royalties expense line. If true, this would enable Pandora to invest even more against growing its brand and expanding its product offering in the U.S. and abroad with the capital freed-up by the decision. This too is fantastic news. As has been well documented, despite Pandora having a huge audience of raving fans, it has been heretofore unable to turn a profit. This decision could be its remedy and give heart to entrepreneurs watching them as the canary in the coal mine to see if digital audio can be as profitable as it is possible.

Then my iPhone notified me that I had an update. At the very center of that update was iTunes Radio. Apple is now in the game. By definition the game just got a lot more interesting. 11-million-listeners more interesting in the first weekend alone, to be exact. The question now is where will those listeners end up? Will iTunes Radio grow the streaming radio sea, or just steal fishes away from the other sharks that have made it their home?

On one hand I feel I've waited a long time for this to happen. On the other, we seem to have gone from the buggy to the Hyperloop overnight. The one thing that’s for certain is that while traditional radio is still (and will forever be) visible on the event horizon, audio consumption is being pulled into a singularity by a force as natural as gravity – the will of consumers.